Consider the utility function u x y ln x ln y Initially the prices are p x unit and p y unit

Consider the utility function u x y ln x ln y Initially the prices are p

x y ln x ln y Initially the prices are p x unit and p y unit The consumer has an income of

Consider the utility function u x y ln x ln y Initially the prices

are p x unit and p y unit The consumer has an income of

Consider the utility function u x y ln x ln y

Consider the utility function u

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Amount: | $25 |

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Paper instructions

Consider the utility function u(x,y) = 2lnx + lny. Initially, the prices are px = $2/unit and py = $1/unit. The consumer has an income of $24. Illustrate your answers with graphs.
(a) Derive the consumer's optimal consumption bundle.
(b) Now suppose the price of good x increases to = $3/unit. What is the new optimal consumption bundle?
(c) Calculate the substitution effect and the income effect.Illustrate it on a graph.
(d) Calculate the compensating variation and equivalent variation of the price change.

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Consider the utility function u ( x,y ) = 2ln x + ln y . Initially, the prices are p x = $2/unit and p y = $1/unit. The consumer has an income of...